The town and police union have a contract after a nearly two-year standoff over wages and other benefits after a decision came down Monday from a Hartford arbitration board mediating the impasse.

First Selectman Rob Mallozzi said last week he believed the settlement by the arbitration board was fair.

"It is a very good positive contract for both sides," Mallozzi said.

The arbitrator imposed a four-year contract with 2 percent raises in the first and third years, and 2.25 percent wage increases in the second and fourth, according to town officials.

Mallozzi said he believes the arbitrator's decision marks a win for the town giving New Canaan, in large measure, some of the modifications it sought, including requiring significantly higher pension contributions and eliminating a cap on retiree health care costs. Those costs will now mirror the increases paid by active employees.

Mallozzi said the changes are also similar to changes accepted by the town's fire and other unions. The contract covers 46 unionized personnel including patrol officers, sergeants and lieutenants.

Mallozzi said that removing the cap on health care costs and getting bigger pension contributions were key facets for the town in collective bargaining agreements for fire personnel, the town public works department and police, all three of which have been settled in recent times.

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"I said when I was elected that I would be working to craft a modern day negotiated contract that reflects increased cost of medical care, wage volatility, and pension volatility," Mallozzi said. "I wanted to make sure adequate money was going into the pension system."

Mallozzi thanked the department command staff, and finance and human resources personnel of the town for their work on the contract.

Mallozzi said that it was disappointing that the police union did not agree on similar terms sooner, which would have saved the town legal expenses and time to get the pact done.

"This is a contract that both sides should be able to work under and build on for the future," Mallozzi said. "It is just so unfortunate for our taxpayers, and the working climate here in town, that the police union couldn't agree to the reasonable terms offered to all unions in the town two years ago and were substantially granted by this decision."

Police have been working under the conditions of their most recent contract which covered July 2010 to June 2013.

Contract negotiations stalled last year, and the state arbitration board offered to step in to mediate the contract.

Eric Brown, general counsel for the union and the AFSCME Connecticut Council of Police Unions 15 countered Mallozzi's claim that police were unwilling to negotiate by contending the reverse was true. Brown said the arbitration award giving raises in all four years of the contract is in excess of what the town initially put on the table.

Brown said the arbitrator also maintained defined benefit pensions for officers rather than a change over to a 401k-type plan for active officers.

"We got the wages we were looking for," Brown said. "The town came in with the intention of gutting the pension plan, and we're paying less of the health insurance cost than they wanted us to pay. I feel like the town pushed the contract into arbitration at great cost to the town and taxpayers by not being willing to negotiate."

Selectman Nick Williams seconded Mallozzi's position that the award was a positive one for the town financially.

"I think the award has some significant advantages for the town, significantly the wages being commensurate with what other collective bargaining units have received recently," Williams said. "Unfortunately, the police didn't view our offers as reasonable offers but I'm delighted with the outcome, which is positive in many respects."